Delta places order for 100 Boeing 737 aircraft

Jul 18, 2022, 6:37 AM | Updated: Jul 19, 2022, 1:36 am

Delta is ordering 100 737 Max 10 airplanes, the largest of the line produced by Boeing, potentially giving the manufacturer additional momentum after a troubled rollout of its most advanced aircraft.

Delta has an option to purchase 30 more of the aircraft as the airline looks to keep up with surging travel demand.

Boeing has struggled to keep up with its European rival Airbus after a pair of 737 Max aircraft crashed in a short span of time, killing 346 passengers and crew members.

Shares of Boeing Co. rose 3% and Delta Air Lines Inc., based in Atlanta, gained 5% in early trading.

Airlines are aggressively trying to reduce costs and the 737 Max can help them do that. Delta Air Lines said Monday that the airplanes, which can seat up to 230 people, will reduce fuel consumption and emissions by 20% to 30% compared with the planes it will replace.

However, the Max 10 has not been certified by federal regulators.

Boeing is rushing to get that approval before a year-end deadline, when new standards enacted after two crashes of Max jets would require that the planes have a cockpit-alert system that warns pilots about some malfunctions on the plane. Boeing is also lobbying Congress for an exemption to the standard, according to published reports.

Financial terms of the order were not disclosed. The plane carries a list price of $134.9 million, according to Boeing’s website, but airlines routinely receive deep discounts.

Airlines have attempted to absorb surging demand for flights. While they struggled during the COVID-19 pandemic amid lockdowns and quarantines, they’re now experiencing extremely high demand from millions eager to travel now that vaccines are readily available and restrictions have eased.

Last week Delta reported that it earned $735 million in the second quarter as packed planes and higher fares boosted revenue close to pre-pandemic levels. But rising fuel prices and the cost of canceling more than 4,000 flights in May and June were a drag.

The deal with Delta, announced at the Farnborough International Air Show near London, provides an additional shot in the arm for Boeing. The manufacturer announced last week that it delivered 51 passenger and cargo planes in June, its best month for deliveries in more than three years. Of those deliveries, 43 were for its 737 Max airliners.

Regulators around the world grounded Boeing’s 737 Max jets in March 2019, after the crash of an Ethiopian Airlines jet, five months after another Max flown by Indonesia’s Lion Air plunged into the Java Sea. The U.S. Federal Aviation Administration cleared Boeing’s 737 Max for flight in November 2020.

Delta has a fleet of more than 850 mainline aircraft, including more than 450 Boeing 717s, 737s, 757s and 767s.

___

Airlines reporter David Koenig in Dallas contributed to this report.

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Delta places order for 100 Boeing 737 aircraft